Self employed struggling with debts vastly beyond their earnings
Rural England has a higher proportion of self employed people and small businesses and this article therefore throws some interesting insights into another key factor (debt) affecting the sustainability of those living in rural places.
Self-employed workers are burdened with debt four times greater than those in full- or part-time employment, a leading debt charity has warned.
The self-employed are financially worse off every month, have higher mortgage debts and significantly higher levels of other borrowing such as credit card debt, according to the StepChange debt charity (formerly the CCCS).
In a report commissioned by the Centre for Economics and Business Research (CEBR) using StepChange’s client database, the charity found self-employed people face average debts of 18.6 times their annual income, compared to 4.1 times annual income for those working full or part time.
Most of the debt related to mortgages, with the average self-employed person crippled by outstanding mortgage debt of £206,500 compared to £54,600 for full- or part-time workers. The self-employed were also found to earn 14% less than their peers.
The report found that non-mortgage debt stood at an average £42,500 for the self-employed, compared to £24,200 for those in full- or part-time employment. StepChange said the difference in credit card borrowing illustrates “the marked difference in the fortunes of the two groups” – the self-employed have average debt of £16,100 on their cards, compared to £6,894 for those in full- or part-time employment.